Religion & Law

Apparently the Obama Administration is due to issue its new regulations on conscience rights for health care providers sometime between now and March 1.  (See this court filing.)  I'm trying to get up to speed on the Bush regs, and I have a couple of questions:

1) Are folks who oppose the Bush regs arguing that they represent a change in the law, and if so, what is their argument?  I can understand opposition based on opposition to the underlying laws (Church Amendments, Public Health Service Act, Weldon Amendment) or on wanting to keep the existing laws underenforced and underpublicized, but I can't figure out any way to view these regulations as changing the existing law.  Any thoughts?

2) Section 88.4(d)(2) of the regulations provides that a covered entity shall not: "discriminate in the employment, promotion, termination, or the extension of staff or other privileges to any physician or other health care personnel because he performed, assisted in the performance, refused to perform, or refused to assist in the performance of any lawful health service or research activity on the grounds that his performance or assistance in performance of such service or activity would be contrary to his religious beliefs or moral convictions, or because of the religious beliefs or moral convictions concerning such activity themselves."

Given the language in bold, does this mean that a Catholic health care organization could not refuse to hire or grant privileges to a physician who is a notorious provider of late-term abortions, for example?  If the person provides the services based on his moral convictions, wouldn't that person fall within this regulation's protection?  (Obviously the organization could prevent the person from performing the services at that organization, but the physician could maintain their own private practice.)  Or would a research entity dedicated to pro-life values be precluded from refusing to hire someone who has been a leader in embryonic stem cell research?

If I'm correct in my interpretation of the provision (and I very well may be wrong), this does reflect an accurate view of conscience (i.e., sometimes conscience forbids, but sometimes conscience permits).  A policy based on that reality, though, creates problems when it focuses almost exclusively on conscience protection at the level of the individual provider.  Institutional identity gets pushed to the margins.  Am I missing something?